Question

A manufacturing plant is trying to determine standard production per day for an incentive program. Suppose that the incentive program will pay $1 per unit produced above standard rates. A worker is timed at an average of 280 seconds per unit, with a performance rating of 105%. The plant has an allowance factor of 13%. If the worker later produces 100 units in an 8 hour shift, how much would he receive under the incentive plan

Answer 1

Answer:

He would receive $15 under incentive plan.

Explanation:

The given values are:

Average observed time

= 280 seconds per unit

Performance rating

= 105%

i.e.,

= 1.05

Allowance factor

= 13%

i.e.,

= 0.13

So,

⇒  $Standard \ time = \frac{(Average \ observed \ time\times Performance \ rating)}{1-Allowance \ factor}$

On putting the estimated values, we get

                             $=\frac{(280\times 1.05)}{(1-0.13)}$

                             $=\frac{294}{0.87}$

                             $= 337.93 \ seconds$

The available time will be:

= $(8 \ hours\times 60 \ min/hr\times 60 \ sec/min)$

= $28800 \ seconds$

Now,

The Standard production per day will be:

= $\frac{Available \ time}{Standard \ time}$

= $\frac{28800}{337.93}$

= $85.22 \ units$

Since he generates 100 units, he consumes about 15(00-85,22) units per day well above normal production.  

So that he's going to get:

= $15\times 1$

= $15$ ($)